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PPG Industries VRIO / VRIN Analysis | Assignment Help
What is VRIO / VRIN Analysis ?
VRIO stands for – Value of the resource, Rareness of the resource, Imitation Risk, and Organizational Competence.
VRIO is a resource focused strategic analysis tool.
To build a sustainable competitive advantage the resources that –casename— needs to be valuable, rare, and difficult to imitate. Secondly the –casename— needs to possess capabilities, organizational structure, and culture to optimize the available resources usage. VRIO analysis can help organizations such as PPG Industries to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for PPG Industries? Defining Valuable in VRIO
A resource or capability is considered valuable for PPG Industries , if it allows the
PPG Industries to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow PPG Industries to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for PPG Industries.
What are Rare Resources for PPG Industries? Defining Rare in VRIO
In an industry that PPG Industries operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. PPG Industries require rare resources to compete in the industry. If PPG Industries don’t have rare resources that are required to succeed in the industry then PPG Industries won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide PPG Industries competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for PPG Industries? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to PPG Industries for certain period of time as all the competitors are going to try to imitate or replicate that resource. A sustained competitive advantage emerges, if the resource is difficult to imitate by the competitors. PPG Industries can create inmitability by innovating on the product side, reducing pain points on service delivery, and having an effective post sales servicing strategy.
Check out the SWOT analysis of PPG Industries
What is a Organization for PPG Industries? Defining Organization in VRIO
Even if the PPG Industries has all the valuable resources that are both rare and difficult to imitate, it won’t automatically result into a sustainable competitive advantage. The key to build the sustainable competitive advantage is to have organizational capabilities, expertise, and structure to exploit the resources. If PPG Industries is not organized based on its strengths then it won’t able to exploit all the resources that it possesses.
Resources | Value | Rare | Imitation | Organization | Competitive Advantage |
---|---|---|---|---|---|
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Track Record of Leadership Team at PPG Industries | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Supply Chain Network Flexibility of PPG Industries | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by PPG Industries organizational structure and capabilities | Keeps the business running |
Ability to Attract Talent in Various Local & Global Markets | Yes, PPG Industries strategy is built on successful innovation and localization of products | Yes, as talent is critical to firm's growth | Difficult to imitate for the current competitors of PPG Industries | To a large extent yes | Providing Strong Competitive Advantage |
Financial Resources of PPG Industries | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | PPG Industries has reasonably sound financial position | PPG Industries has relatively sustainable Competitive Advantage |
Opportunities in the E-Commerce Space for PPG Industries - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and PPG Industries can exploit the emerging opportunities | No, most of the competitors are investing in IT to enter the space | The AI and inhouse analytics can be difficult to imitate | It is just the start for the organization | In the long run it can provide sustainable competitive advantage |
Sales Force and Channel Management of PPG Industries | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide PPG Industries sustainable competitive advantage. Potential is certainly there. |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for PPG Industries to thwart competition | Yes, IPR and other rights are rare and competition of PPG Industries will find it extremely difficult to copy | Risk of imitation is low but given the margins in the industry disruption chances are high | So far the firm has not utilized the full extent of its IPR & other properties | Providing Strong Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps PPG Industries in delivering lower costs | No | Can be imitated by competitors of PPG Industries but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Opportunities for Brand Extensions for PPG Industries products | Yes, new niches are emerging in the market | No, as most of the competitors are also targeting those niches | Yes can be imitated by the competitors | Brand extensions will require higher marketing budget | Temporary Competitive Advantage |
Brand awareness of PPG Industries products and services | Yes, the brand awareness of PPG Industries products are high | Yes, PPG Industries has one of the leading brand in the industry | No | PPG Industries has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Access to Cheap Capital for PPG Industries | Yes, as a leading player in the industry and current macro economic conditions, PPG Industries has access to cheap capital | No | Can be imitated by the competitors of PPG Industries | Not been totally exploited | Not significant in creating competitive advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of PPG Industries | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of PPG Industries | Yes, it is valuable in the industry given the various segmentations & consumer preferences. | Most of the competitors are trying to enter the lucrative segments | Can be imitated by the competitors | The firm has used it to good effect, details can be found in case exhibit | Provide short term competitive advantage but requires constant innovation to sustain |
PPG Industries SWOT Analysis, SWOT Matrix, Weighted SWOT Case Study Solution & Analysis
Books and References
Ahir Gopaldas and Anton Siebert (2022 July August) "What You’re Getting Wrong About Customer Journeys",
Harvard Business Review , 92
Linda A. Hill, Emily Tedards, and Taran Swan (2021) "Drive Innovation with Better Decision-Making", Harvard Business Review 86
Dyer, J. H., & Hatch, N. (2004). Using Supplier Networks to Learn Faster. Sloan Management Review, 45(3), 57–63
Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17, 99–120
Dyer, J. H., Kale, P., & Singh, H. (2004, July–August). When to ally and when to acquire. Harvard Business Review, 109–115
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